Content Sponsored By:

DOL Proposes 401k Fiduciary Rule Delay (Again)

Current date for full implementation is January 1, 2018

401k, fiduciary, Department of Labor, retirementU.S. Capitol. Washington , D.C.

For anyone keeping track, the Department of Labor made it official Wednesday by posting paperwork to the Federal Register that would delay full implementation of the fiduciary rule until January 1, 2019.

The current date for full implementation is one year earlier, January 1, 2018. The additional delay was first proposed in early August and approved by the Office of Management and Budget earlier this week.

“The Department is particularly concerned that, without a delay in the applicability dates, regulated parties may incur undue expense to comply with conditions or requirements that it ultimately determines to revise or repeal,” the filing notes.

It proposes to extend the special transition period under sections II and IX of the Best Interest Contract Exemption and section VII of the Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRA.

“This document also proposes to delay the applicability of certain amendments to Prohibited Transaction Exemption 84-24 for the same period,” it adds. “The primary purpose of the proposed amendments is to give the Department of Labor the time necessary to consider possible changes and alternatives to these exemptions.”

It would affect participants and beneficiaries of retirement plans, IRA owners and their fiduciaries.

Comments on the DOL’s proposed 18-month fiduciary delay are due 15 days after today, meaning on or before September 14, 2017.

“Given the uncertainty generated by the President’s mandated review and, based on the DOL’s proposal, the increasing likelihood of changes or alternatives to the Exemptions, the proposed 18-month delay is welcome,” The Wagner law group said in a release. “We think it highly likely that the DOL will finalize the proposal in relatively short order (the short, 15-day comment period is evidence of the DOL’s desire to finalize the proposal quickly).”

Fiduciary rule supporters criticized the DOL’s action.

“This delay would cost people saving for retirement $10.9 billion over the next 30 years—on top of the $7.6 billion that they will lose as a result of delays that DOL has already put in place,” the Economic Policy Institute wrote on its website. “The only explanation for why the Trump administration is forcing these delays is that they are doing so at the behest of the financial services industry.

“The only people who benefit from the delay of this rule are unscrupulous financial advisors and financial services companies, who will be allowed to steer customers towards investments that pay a lower rate of return for the saver, but offer a higher commission to the advisor.”

2 Comments on "DOL Proposes 401k Fiduciary Rule Delay (Again)"

  1. “This delay would cost people saving for retirement $10.9 billion over the next 30 years” What a BS comment. Placing people into a fee based account does not save fees nor does it hurt the financial companies.

  2. What we need is a full DOL fiduciary best practices rule for all attorneys. All attorney fees need to be capped, fully disclosed, and documented to be the lowest costs for all clients. Attorney’s who change firms must also disclose any upfront monies they received to make the move. We also need to establish a fully regulated “Attorney Check” online to disclose any “events” in their practice.

Leave a comment

Your email address will not be published.


*